‘Malta is a Trojan Horse for dodgy money’

The EU’s problem with “dirty money” linked to the sale of passports, highlighted by ‘McMafia’ author Misha Glenny, gained resonance following revelations in a report by French channel M6 where the first agent ever granted a licence in Malta boasted about the ability to get a passport for dubious characters involved in crime.

“The golden passports issue in Malta is something that I have to point out because this is a way in which illegal money seeps its way into the system through people who gain citizenship, and that has to stop,” Glenny told The Shift.

He is the author of the bestseller ‘McMafia: A Journey Through the Global Criminal Underworld’, having researched organised crime for 25 years.

On 23 September, Identity Malta suspended the licences of a firm operating as an agent for the country’s cash for passports scheme hours after a French news programme broadcast an interview with a Senior Partner and lawyers of Chetcuti Cauchi Advocates, recorded telling passport clients that Ministers could “turn a blind eye” to those rejected due to criminality.

Jean-Philippe Chetcuti, whose name is blurred in the programme ‘Enquete’, also referred to his personal relationship with the Prime Minister. His company was the first to be granted a licence when the Labour Party suddenly announced the scheme soon after it was elected in 2013.

Glenny told The Shift it was evident, in countless cases of illegal money laundering, that it entered the system via individuals who gained EU citizenship.  “There is a problem of dirty money in the EU and Malta is a sort of Trojan Horse for dodgy money, but also for the selling passports.”

Cash for passports agent boasts of influence in ‘corridors of power’

French channel M6 broadcast the documentary about the controversial cash for passports citizenship scheme and filmed an exchange with undercover reporters at the offices of Maltese passport agents Chetcuti Cauchi Advocates in Valletta while posing as lawyers for African customers who wanted to purchase Maltese citizenship.

Chetcuti informed the customer, in reality a French undercover reporter, that he was “well connected to the corridors of power” and that Prime Minister Joseph Muscat was a childhood friend. They travelled to school together in his father’s car.  He also said they were invited to one another’s childhood birthday parties and said of the Prime Minister: “We understand each other.”

The lawyer and agent providing Malta’s cash for passports scheme also said on film that his wife was a childhood friend of Parliamentary Secretary for Citizenship Julia Farrugia: “It’s good to have a wife with such friends,” he said, selling his credentials to someone he thought was a potential client.

The journalists asked what would happen if a client from Africa was interested in purchasing Maltese citizenship but may face obstacles because of a criminal record. The agent said passport buyers refused could get a second chance.  “It is possible,” he said. “Ministers turn a blind eye.”

The agent tells the undercover journalists he knows Justice Minister Owen Bonnici personally as the Minister had previously worked as a lawyer for the same firm. “We are one of the only passports agencies with a 100% success rate.”

Despite the suspension of the company’s licences, the authorities referred to the news as “the dissemination of misleading information”, pointing out that 19% of applications from Chetcuti Cauchi had been denied. The firm said the news was  “a gross misrepresentation”.

The news programme states the Ministers mentioned were contacted and denied they had intervened in any passport applications. The law firm has also denied trading in influence. The regulator has been asked to review each file submitted by the firm Chetcuti Cauchi.

Identity Malta, the agency responsible for overseeing the sale of passports, has come under increasing pressure after a string of arrests in foreign jurisdictions of individuals who had successfuly passed Malta’s ‘strict’ due diligence procedures.

Russian national Boris Mints, Egyptian national Mustafa Abdel Wadood, and Chinese billionaire Liu Zhongtian were all arrested on suspicion of financial crimes in the US and the UK.  Yet, Identity Malta told The Shift it would not be conducting a review of individuals who had gained Maltese citizenship, insisting there was a “rigorous” system in place.

Malta’s citizen by investment scheme has been criticised by the European Commission which said the sale of Maltese passports put the entire EU at risk of money laundering, corruption and organised crime.